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Effects of educational mismatch on private returns to education: An analysis of the Spanish case (1995–2006)

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  • Murillo, Inés P.
  • Rahona-López, Marta
  • Salinas-Jiménez, Maria del Mar

Abstract

This study examines the effects of educational mismatch on wages in the Spanish labour market since the mid-nineties. First we study the evolution of returns to education and then we estimate returns to education in terms of the match between the worker's schooling and the job requirements. The results indicate that returns to education have declined since the mid-nineties. One also finds that the return associated with the job's required education is greater than that corresponding to the worker's actual schooling, and that the return on an additional year of attained education is positive but less than that of an additional year of required education. From a policy perspective, the existence of educational mismatch points to inefficiencies in the allocation of the educational resources. Investment on education can positively contribute to alleviate the unemployment problem in Spain, but taken into account the existence of educational mismatch it also becomes necessary to introduce structural reforms in order to adapt the job structure to a model of production based on knowledge so that the more highly qualified workers can find a job that corresponds to their educational level.

Suggested Citation

  • Murillo, Inés P. & Rahona-López, Marta & Salinas-Jiménez, Maria del Mar, 2012. "Effects of educational mismatch on private returns to education: An analysis of the Spanish case (1995–2006)," Journal of Policy Modeling, Elsevier, vol. 34(5), pages 646-659.
  • Handle: RePEc:eee:jpolmo:v:34:y:2012:i:5:p:646-659
    DOI: 10.1016/j.jpolmod.2011.07.012
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    References listed on IDEAS

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    Cited by:

    1. Raúl Ramos & Esteban Sanromá, 2013. "Overeducation and Local Labour Markets in Spain," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 104(3), pages 278-291, July.
    2. repec:spr:soinre:v:132:y:2017:i:3:d:10.1007_s11205-016-1338-x is not listed on IDEAS
    3. repec:spr:soinre:v:134:y:2017:i:1:d:10.1007_s11205-016-1423-1 is not listed on IDEAS
    4. Bender, Keith A. & Roche, Kristen, 2013. "Educational mismatch and self-employment," Economics of Education Review, Elsevier, vol. 34(C), pages 85-95.
    5. Iriondo, Iñaki & Pérez-Amaral, Teodosio, 2016. "The effect of educational mismatch on wages in Europe," Journal of Policy Modeling, Elsevier, vol. 38(2), pages 304-323.
    6. Ponzo, Michela, 2013. "Does bullying reduce educational achievement? An evaluation using matching estimators," Journal of Policy Modeling, Elsevier, vol. 35(6), pages 1057-1078.
    7. Ponzo, Michela & Scoppa, Vincenzo, 2014. "The long-lasting effects of school entry age: Evidence from Italian students," Journal of Policy Modeling, Elsevier, vol. 36(3), pages 578-599.
    8. repec:eee:jpolmo:v:39:y:2017:i:5:p:909-927 is not listed on IDEAS

    More about this item

    Keywords

    Return to education; Required education; Overeducation; Undereducation;

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I29 - Health, Education, and Welfare - - Education - - - Other
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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